(BFM Bourse) – The European Commission validated this Thursday the exclusive rights granted by the State to the gambling operator after France, however, committed to ensuring that FDJ would add a price supplement of 97 million dinars. ‘euros.
This is the epilogue of a soap opera that poisoned FDJ’s stock market life for more than three years.
In the summer of 2021, the European Commission opened an investigation into the grant by the French state to FDJ of exclusive rights to physical and online lottery as well as sports betting for a period of 25 years in exchange for a balance of 380 million euros. The European Commission sought to know whether this operation, carried out as part of the privatization of the group, had not provided an undue advantage to the company.
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The verdict from the European Commission was then slow in coming. The market began to fear that it would result in a significant additional price for the group (the Citi bank mentioned more than 1.5 billion euros in 2022). This uncertainty undermined visibility on FDJ shares.
At the beginning of October, the CEO of FDJ, Stéphane Pallez, however estimated on BFM Business that this decision could soon arrive. As for a potential price supplement, if Brussels were to pronounce one, Stéphane Pallez judged that this “adjustment” would not exceed an amount “rather in the low hundreds of millions of euros, which we have fully taken into account “.
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It will ultimately be even less. This Thursday, the European Commission made its decision, putting an end to a real Arlesian situation.
Brussels has, ultimately, validated the principle of granting exclusive rights to the gambling operator.
However, as part of a discussion with the French State, the Commission validated modifications to the methodology for calculating these rights. This resulted in a price supplement of only 97 million euros (for a total, therefore, of 477 million euros).
“As France has committed to increasing the remuneration of the FDJ to 477 million euros, the Commission concluded that this measure (the granting of exclusive rights) did not constitute aid,” Brussels declared.
“On this basis, the Commission authorized the French measure under European Union state aid rules,” the Commission added.
On the Paris Stock Exchange, FDJ shares took off after this announcement, and gained 4.6% around 12:15 p.m., the communication from Brussels having fallen at 12 p.m. “This is very good news because it removes uncertainty,” commented on BFM Bourse Eric Bleines, director of equity management at Swiss Life Gestion Privée.
FDJ published a press release early this afternoon following the European Commission’s statement. “FDJ welcomes the closure of this file and the confirmation, in continuity with the decision of the Council of State of April 14, 2023, of the robustness of the legal framework adopted during the privatization of the company,” argued the business.
The company indicated that the additional price of 97 million euros will be treated, like the entire payment of exclusive rights, as an intangible asset which is amortized over a period of 25 years. These depreciations for exclusive rights will amount to 37 million euros in 2024, after 15.2 million euros in 2023, and are forecast at 19.1 million in 2025.
This should not have an impact on the calculation of the dividend because FDJ has indicated that it will be based, from 2024, on adjusted net income, which excludes certain elements of consolidated net income, including tangible and intangible depreciation.
Julien Marion – ©2024 BFM Bourse
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